7 Investing Lessons from Bollywood you would have never guessed.

Gaurav Rastogi

8 years ago

Table of Contents

Know your product:

SIP or Systematic Investment Plan invests the same amount periodically (usually one month) in a Mutual Fund. SIP helps you achieve Rupee Cost Averaging – you buy more units of the Mutual Funds when the price is low and fewer units when price is higher. The biggest advantage of a SIP is discipline – you invest regularly and without spending too much time. If you do your SIP through an online platform like ours (or others), then we help you rebalance your portfolio periodically. A truly simple and effcient solution to implement.

Be vary of investment costs:

Do not pay commissions to invest in Mutual Funds. How much do commissions cost – a 1.5% comission means you will have 45% less money after 25 years vs investing in “Direct Plan” Mutual Funds. How do you know if you are paying commissions? If the fund name you own does not have the word “Direct Plan” your advisor / broker is getting commissions from Mutual Fund companies. If the investment broker or advisor is free for you, they are getting commissions from Mutual Funds companies.

Balance Consumption and Investment:

It is important to balance your consumption and investments. Even if you start small, start investing as soon as possible. Time is more important in compounding than money – so don’t fall into the trap that “I will start investing when I earn more money.” A Rs5,000 monthly SIP over 35 years will lead to a ~25% bigger portfolio than a Rs15,000 monthly SIP over 25 years.

Focus on making your life easy:

Credit products are easy to amass, but the EMI always come calling. Think of SIP as a reverse EMI, where you pay yourself a small amount every month for a more secure future. Be proud to own a SIP over a bangla or a gaadi bought on a loan.

Stay committed to your investment plan:

Equity markets, or debt markets (or real estate or gold) do not go up in value in a straight line. Do not be afraid of short term fluctuations in your portfolio. Stay committed for the long run and you will yield the benefits. Churning, or buying and selling SIP’s regularly, defeats the purpose of starting a SIP in the first place. Re-balance periodically, but don’t trade often.

Invest based on your goals:

Any investment portfolio should have at least three kinds of exposure – large cap equities, small and mid cap equities and bonds. If you are up for it add, global equity exposure and commodity exposure too. Further, you should take more risk for long term goals and less for short term goals. Ensure you re-balance periodically based on market movements and the remaining maturity of the goal. An investment platform like ours can help simplify goal tracking and re balancing.